Use access key #2 to skip to page content.

Ideas for CAPS blog series - Economic Myths

Recs

37

February 15, 2010 – Comments (35)

I'm looking to the CAPS community for ideas on a blog series. 

Since my first post in CAPS, I have tried (but occasionally failed) to stay within my small box of knowledge.  For example, you won't see me breaking down the technical aspects of a stock's price.  It's a worthwhile topic with a high demand here, but there are better bloggers already here for it.  My box is economics and economic history - topics that CAPS readers appear to demand judging by the response.  So I'm happy to continue for as long as life makes it possible.

About a year ago, I did a seven part series on money creation.  It was well rec'd.  Since then my writing and argumentation skills have improved.  Sitting down today, I surveyed a few of the economic myths that I could deconstruct on CAPS, providing me with a chance to do the research I enjoy and providing the community with access to knowledge they find interesting.

Instead of just picking one myself, I am looking to my friends on CAPS for ideas. What economic myths would you like to see completely eviscerated from top to bottom in a blog series? 

Here are some that I am mulling over:

Myth: Antitrust law serves the consumers by breaking up monopolies that use predator pricing (or other unfair cutthroat competitive practices) and unfair labor practices.
Fact:  Antitrust prosecution never has the consumer in mind, is almost always devoid of any real evidence, is often instigated by inferior yet politically-connected competition, and diverts the public from the real monopolies the government and its cronies are creating.

Myth: Herbert Hoover's do-nothing laissez faire approach was a prime factor in causing the Great Depression
Fact: Hoover was a Progressive and hyperinterventionist whose array of failed policies are entirely ignored so that academics/politicians can lay the blame for the Great Depression on a failed market while they usher in policy after policy that Hoover himself would have cheered.

Myth: Unions are the primary reason that wages have risen in capitalist nations.
Fact:  The primary cause for the increase in the standard of living in any nation is an increase in capital investment.  Capital investment makes labor more productive, stretching the dollar of every worker, causing a rise in real wages.  There is nothing that Unions can ever do to bring about a general rise in the standard of living of the nation's workers. 

Myth:  FDR saved us from the Great Depression
Fact:  The only thing FDR saved us from is a quick recovery, just like his hyperinterventionist predecessor Herbert Hoover

Myth: Capitalism is inherently wasteful
Fact:  This one is usually tossed around by the peddlers of class warfare.  The waste they are witnessing is the process of dynamic discovery, whereby entrepreneurs take risks to discover the best way to satisfy consumer demands.  Of course, government waste is rarely if ever compared to entrepreneurial "waste" by these same critics.

Myth:  Central Planning works
Fact:  It doesn't

I'm open to tackling any of these subjects, or another if anybody has a better idea. 

Of course, I have detractors among my regular readers.  I'm willing to look at your ideas as well, if they are within my range of expertise and they are serious requests.  So fire away and let's see what we get.

David in Qatar

35 Comments – Post Your Own

#1) On February 15, 2010 at 6:10 PM, whereaminow (24.34) wrote:

A couple more I'm considering:

Myth: The free market of the 19th century led to the rise of Robber Barons who ruthlessly crushed their competition while exploiting American workers and consumers.
Fact:  The 19th century saw an unprecedented rise in the standard of living of every America thanks to men who achieved spectacular breakthroughs.  The real Robber Barons were the ones who used the government to steal from the public trough.  Historians, intentionally or not, ignore this crucial difference.

Myth:  A free market suffers from a "free rider" problem, where some services will not be provided by the entrepreneurial community.
Fact:  There has never been a "free rider" problem.  The theory is either an ex post facto justification for government intrusion in an already competitive market or an excuse for the theft of public funds for projects with little-to-no market value.

Myth: The American Indians were great environmentalists
Fact:  Like all people, the record is a mixed bag.

Myth:  The Wild West was a chaotic, violent place where lawlessness and brutality reigned.
Fact:  The Frontier was actually quite tame.  There was little violence, respect for property rights, and no need for a coercive government to secure order.

David in Qatar

Report this comment
#2) On February 15, 2010 at 6:11 PM, USNHR (32.79) wrote:

There is nothing that Unions can ever do to bring about a general rise in the standard of living of the nation's workers. 

_________________________________________

I couldn't agree more. And the things that they were able to provide employees are now mandated by the government through various laws like ADA, ERISA, USERRA, EEOC, (O'bama care?) and others. Unions have no place today. They are nothing but power hungry money grabbers. Why the working man belongs to one I can't fathom.

I would like to see an in depth discussion of Hoover's economic policies, their effects, and how they compare/contrast with the current administration.

Report this comment
#3) On February 15, 2010 at 6:12 PM, chk999 (99.97) wrote:

Go for the central planning one. Most people have no idea how badly the five year plans worked. Or how hard it was to get even basic consumer goods in the Soviet Union.

Report this comment
#4) On February 15, 2010 at 6:28 PM, FleaBagger (28.76) wrote:

I want to read a well-researched, example-rich series on this one:

Myth:  The Wild West was a chaotic, violent place where lawlessness and brutality reigned.
Fact:  The Frontier was actually quite tame.  There was little violence, respect for property rights, and no need for a coercive government to secure order.

That one is hands-down my favorite. The only other one that really jumped out at me was

Myth:  A free market suffers from a "free rider" problem, where some services will not be provided by the entrepreneurial community.
Fact:  There has never been a "free rider" problem.  The theory is either an ex post facto justification for government intrusion in an already competitive market or an excuse for the theft of public funds for projects with little-to-no market value.

Thanks for sharing your ideas and research! One thing I would like to see is a John Stossel-like expose on inadequacies in the government-planned society in Scandinavian socialist countries, but that may be beyond your scope. I know I have no idea where to look for that kind of data (short of actually going and living there, which I am not about to do).

Report this comment
#5) On February 15, 2010 at 6:34 PM, truthisntstupid (92.30) wrote:

David, whether I agree or disagree with you I always like to read what you write.   I have tried to read The Wealth Of Nations, and struggled through something less than half of it.  I run into trouble when Adam Smith starts talking in terms of money because I can't relate a pence to a shilling or a pound;  and I don't quite recall what other jargon of the times gave me trouble.  I recall some of your blogs drawing parallels between our modern-day economic struggles and similar struggles of peoples and civilizations of the past and those were always very good. 

Report this comment
#6) On February 15, 2010 at 6:37 PM, whereaminow (24.34) wrote:

Flea,

If you haven't seen it, here is an extremely long and interesting debate on Scandinavian socialism.  Hope this helps.

David in Qatar

Report this comment
#7) On February 15, 2010 at 6:45 PM, Option1307 (29.96) wrote:

I vote for all of them!

But for starters, how abou:

Myth: Antitrust law serves the consumers by breaking up monopolies that use predator pricing (or other unfair cutthroat competitive practices) and unfair labor practices.

or 

Myth:Unions are the primary reason that wages have risen in capitalist nations.

I already have my opinions on both, but I'd be interested to see your argument. Whatever blog you go with, will certainly be interesting.

 

Report this comment
#8) On February 15, 2010 at 7:35 PM, coralbro (95.09) wrote:

I vote for this one:

Myth:  A free market suffers from a "free rider" problem, where some services will not be provided by the entrepreneurial community.
Fact:  There has never been a "free rider" problem.  The theory is either an ex post facto justification for government intrusion in an already competitive market or an excuse for the theft of public funds for projects with little-to-no market value.

They "explain" free rider issues so convincingly in the economic classes I've taken.  I would like to at least see the other side of the arguement.  Also, what do you think of cap and trade taxes?  Most of the economics professors I've taken classes from are strongly in favor of them.  What do you think?  I think they would be difficult to regulate, and I have heard they are prone to corruption. 

Report this comment
#9) On February 15, 2010 at 7:41 PM, whereaminow (24.34) wrote:

coralbro,

I'm sadly not surprised that your economics professors support cap and trade taxes. If only I could go back to school and sit in on some of these lectures. Man, would it be fun to whip out my laptop and counter these barbarian arguments with a couple of mouse clicks.

David in Qatar

Report this comment
#10) On February 15, 2010 at 9:26 PM, tonylogan1 (28.24) wrote:

#1 indians (I've never heard this debate)

#2 wild west (ditto)

#3 the rest of them

# last place... the "Capitalism is inherently wasteful" - preaching to the choir

Report this comment
#11) On February 15, 2010 at 10:51 PM, angusthermopylae (40.16) wrote:

I would like to see the Centralized Planning issue taken up, esp. since TMFLomax just brought up the subject of DIY recently.

My interest is along these lines:  For about 50 years (Cold War era), one of the Great Beliefs of the West was that "we did it better" because of free markets, individual motivation, and the rapid advancement of technology and efficiency that ensued.  In fact, when the USSR collapsed in the late 80s-early 90s,  this event was used to vindicate that belief.

But at the same time, the US pretty much used Central Planning-style approaches to a wide variety of issues:

--Drug research (Can't work on pharmaceuticals without big money and government approval).

--Automobiles (Huge entry costs, plus multiple regulations and beauracracies to deal with).

--Energy/Fuel (Again, high entry costs, government approval, constant regulation--just google "alternative fuel taxes regulation" to hear some of the stories.)

--Medicine (State licenses for any medical practitioner--you can't even declare someone medically dead or hand out antibiotics without having the government seal of approval.)

I think it would be a good debate, because a lot of those areas would inevitably bring up the argument "but it's for the greater good--can you imagine doing it any other way??  The horror!!"...the same argument that is used to justify Central Planning.

Report this comment
#12) On February 15, 2010 at 11:03 PM, russiangambit (29.37) wrote:

I don't know if central planning is so bad as all that. It is not the most efficient way to run things but it is not enough in itself to bring a country down completely all other things being equal.

Look at China-  central planning and India - chaos.

In USSR the central planning could be summed up as  - how much wealth we can suck out of our popultion this year to continue building the empire? 5% increase each year? Sounds good.  Of course, such approach ws unsustainable. Because the wealth was taken and not reinvested in the industry but instead put into weapons and support on freindly regimes the industry fell behind the times and got outdated and noncompetetive. Add to that disincentive to work hard because everybody is equal ( kind of like american schools today) and voila.

 

Report this comment
#13) On February 15, 2010 at 11:07 PM, angusthermopylae (40.16) wrote:

Sorry..."alternative fuel taxes regulation" gives a bunch of govt incentives--here is a better search, with a selection of the results below:

--Nebraska fuel tax laws--gotta have a license, pay specific excise taxes.

--Man converts vehicle to biodiesel (vegetable oil); two state tax agents show up at his door.

--Recap of above plus other similar news.

Funnily enough, if you do a Google News search for the same term, you get nothing...but I haven't heard of any changes in how highway taxes are structured or paid for...

Report this comment
#14) On February 15, 2010 at 11:18 PM, angusthermopylae (40.16) wrote:

Russian,

Point taken, and I agree.  I phrased my comment as "one of the Great Beliefs" because, like any other widely-held view,  I'm automatically suspicious.  (What can I say--I'm a reactionary that way...)

OTOH, if the debate is that Central Planning is Good/Bad (especially in light of the healthcare/stimulus situations), then just examining the question should shed some light on how people are dealing with  today's problems.

(For example, the Interstate Commerce Clause is pretty much straight in line with the idea of Centralized Planning--since operating under the Articles of Confederation pretty much showed that each state was going to screw everyone else over as much as they could.)

(So my answer to the CP question would be..."sometimes good, sometimes bad.")

Report this comment
#15) On February 16, 2010 at 6:38 AM, whereaminow (24.34) wrote:

angus,

wow, i might just write a blog series titled "Economic Myths that angus repeated in comments 11-14 of my post" as you have thrown out quite a few there. 

I like the Central Planning one, since it would allow me to introduce CAPS readers to the Economic Calculation Problem and the Fatal Conceit, but it might just be boring as hell to most people :)

This is going to be a tough decision.

[btw, msot of the incentives you are referring to are age-old mercantilist policies that have distorted the market process and robbed consumers of efficient producers.]

David in Qatar

Report this comment
#16) On February 16, 2010 at 8:29 AM, USNHR (32.79) wrote:

--Man converts vehicle to biodiesel (vegetable oil); two state tax agents show up at his door.

___________________________________

And people believe the government operates efficiently with low overhead? Shoot, the state spent more money on those two gentlemens pay and transportation for the day than the guy owed in "fuel taxes".

Report this comment
#17) On February 16, 2010 at 8:47 AM, ragedmaximus (< 20) wrote:

hey i just found a website called    THE CONFERENCE BOARD and it might give you guys some ideas like 4 million jobs were posted online down 1 million from when the economy was at it's peak but up 1 million from when we were at the lowest,just food for thought.p.s. I'm a new member here but I like fools alot!

Report this comment
#18) On February 16, 2010 at 9:53 AM, binve (< 20) wrote:

Hey David, awesome idea man!! I would be happy to read about any one of those topics! Thanks!

Report this comment
#19) On February 16, 2010 at 12:45 PM, Melaschasm (56.75) wrote:

Contrasting Hoover to Coolidge would be very enlightening for many people, and would avoid the knee jerk love of FDRs economic policies.

I personally would enjoy learning more about 19th century America and the Robber Barons.

Report this comment
#20) On February 16, 2010 at 1:24 PM, topsecret10 (< 20) wrote:

#2) On February 15, 2010 at 6:11 PM, USNHR (98.91) wrote:

There is nothing that Unions can ever do to bring about a general rise in the standard of living of the nation's workers. 

I couldn't agree more. And the things that they were able to provide employees are now mandated by the government through various laws like ADA, ERISA, USERRA, EEOC, (O'bama care?) and others. Unions have no place today. They are nothing but power hungry money grabbers. Why the working man belongs to one I can't fathom.    LOL !!!!!  You do not have a CLUE about "unions".  I have been a union member for over 25 years. People that disparage unions do not know the history of the labor movement In the United States....  Read up on the history of the American Worker,and If you do your reading on the weekend,keep In mind you have those two days off  thanks to the UNION labor movement....     TS                     

The essence of what labor unions do—give workers a stronger voice so that they can get a fair share of the economic growth they help create—is and has always been important to making the economy work for all Americans. And unions only become more important as the economy worsens.

One of the primarily reasons why our current recession endures is that workers do not have the purchasing power they need to drive our economy. Even when times were relatively good, workers were getting squeezed. Income for the median working age household fell by about $2,000 between 2000 and 2007, and it could fall even further as the economy continues to decline. Consumer activity accounts for roughly 70 percent of our nation’s economy, and for a while workers were able to use debt to sustain their consumption. Yet debt-driven consumption is not sustainable, as we are plainly seeing.

What is sustainable is an economy where workers are adequately rewarded and have the income they need to purchase goods. This is where unions come in.

Unions paved the way to the middle class for millions of American workers and pioneered benefits such as paid health care and pensions along the way. Even today, union workers earn significantly more on average than their non-union counterparts, and union employers are more likely to provide benefits. And non-union workers—particularly in highly unionized industries—receive financial benefits from employers who increase wages to match what unions would win in order to avoid unionization.

Unfortunately, declining unionization rates mean that workers are less likely to receive good wages and be rewarded for their increases in productivity. The Employee Free Choice Act, which is likely to be one of the most important issues debated by the 111th Congress, holds the promise of boosting unionization rates and improving millions of Americans’ economic standing and workplace conditions.

Unions help workers achieve higher wages

Union members in the United States earn significantly more than non-union workers. Over the four-year period between 2004 and 2007, unionized workers’ wages were on average 11.3 percent higher than non-union workers with similar characteristics. That means that, all else equal, American workers that join a union will earn 11.3 percent more—or $2.26 more per hour in 2008 dollars—than their otherwise identical non-union counterparts.

Yet union coverage rates have been declining for several decades. In 1983, 23.3 percent of American workers were either members of a union or represented by a union at their workplace. By 2008, that portion declined to 13.7 percent.

American workers’ wage growth lags as productivity increases

Workers helped the economy grow during this time period by becoming ever more productive, but they received only a small share of the new wealth they helped create. Throughout the middle part of the 20th century—a period when unions were stronger—American workers generated economic growth by increasing their productivity, and they were rewarded with higher wages. But this link between greater productivity and higher wages has broken down.

Prior to the 1980s, productivity gains and workers’ wages moved in tandem: as workers produced more per hour, they saw a commensurate increase in their earnings. Yet wages and productivity growth have decoupled since the late 1970s. Looking from 1980 to 2008, nationwide worker productivity grew by 75.0 percent, while workers’ inflation-adjusted average wages increased by only 22.6 percent, which means that workers were compensated for only 30.2 percent of their productivity gains.

The cost of benefits—especially health insurance—has increased over time and now accounts for a greater share of total compensation than in the past, but this increase is nowhere near enough to account for the discrepancy between wage and productiv¬ity growth. For example, according to analysis by the Center for Economic and Policy Research, between 1973 and 2006 the share of labor compensation in the form of benefits rose from 12.6 percent to 19.5 percent.

If American workers were rewarded for 100 percent of their increases in labor productivity between 1980 and 2008—as they were during the middle part of the 20th century—average wages would be $28.53 per hour—42.7 percent higher than the average real wage in 2008.

Unionization rewards workers for productivity growth

Slow wage growth has squeezed the middle class and contributed to rising inequality. But increasing union coverage rates could likely reverse these trends as more Americans would benefit from the union wage premium and receive higher wages. If unionization rates were the same now as they were in 1983 and the current union wage premium remained constant, new union workers would earn an estimated $49.0 billion more in wages and salaries per year. If union coverage rates increased by just 5 percentage points over current levels, newly unionized workers would earn an estimated $25.5 billion more in wages and salaries per year. Non-union workers would also benefit as employers would likely raise wages to match what unions would win in order to avoid unionization.

Increased unionization would boost Americans’ annual wages

Union employers are also significantly more likely to provide benefits to their employees. Union workers nationwide are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions compared to workers with similar characteristics who were not in unions.

Conclusion

Nearly three out of five survey respondents from a Peter Hart Research Associates poll report that they would join a union if they could, but workers attempting to unionize currently face a hostile legal environment and are commonly intimidated by aggressive antiunion employers. The Employee Free Choice Act would help workers who want to join a union do so by ensuring fairness in the union selection process with three main provisions: workers would have a fair and direct path to join unions through a simple major¬ity sign-up; employers who break the rules governing the unionization process would face stiffer penalties; and a first contract mediation and arbitration process would be intro¬duced to thwart bad-faith bargaining.

Passing the Employee Free Choice Act and making it harder for management to threaten workers seeking to unionize would be good for American workers. It would help boost workers’ wages and benefits. And putting more money in workers’ pockets would provide a needed boost for the U.S. economy. Increasing unionization is a good way to get out of our current economic troubles.

Report this comment
#21) On February 16, 2010 at 1:25 PM, topsecret10 (< 20) wrote:

http://www.dol.gov/OPA/ABOUTDOL/LABORDAY.HTM

Report this comment
#22) On February 16, 2010 at 1:37 PM, topsecret10 (< 20) wrote:

Myth: Unions are the primary reason that wages have risen in capitalist nations.
Fact:  The primary cause for the increase in the standard of living in any nation is an increase in capital investment.  Capital investment makes labor more productive, stretching the dollar of every worker, causing a rise in real wages.  There is nothing that Unions can ever do to bring about a general rise in the standard of living of the nation's workers.     http://www.economicpopulist.org/content/no-long-term-recovery-without-real-wage-growth

Report this comment
#23) On February 16, 2010 at 2:26 PM, awallejr (79.57) wrote:

You should replace your use of the word "Fact" with "Opinion."  With that aside and with respect to Unions, and as TS suggested you might want to look back on what the workplace was like before the NLRA was passed.  Sweatshops were the norm where many larger workplaces had private "police forces" that were very quick to beat people up should they get out of hand or even whisper the word "unionize."

 

Report this comment
#24) On February 16, 2010 at 3:24 PM, paperpump (96.42) wrote:

these 3 would be very interesting!!! all 3 are currently being propagated in our school systems btw. thanks minow

 

Myth: Herbert Hoover's do-nothing laissez faire approach was a prime factor in causing the Great Depression
Fact: Hoover was a Progressive and hyperinterventionist whose array of failed policies are entirely ignored so that academics/politicians can lay the blame for the Great Depression on a failed market while they usher in policy after policy that Hoover himself would have cheered.

Myth: Unions are the primary reason that wages have risen in capitalist nations.
Fact:  The primary cause for the increase in the standard of living in any nation is an increase in capital investment.  Capital investment makes labor more productive, stretching the dollar of every worker, causing a rise in realwages.  There is nothing that Unions can ever do to bring about a general rise in the standard of living of the nation's workers. 

Myth:  FDR saved us from the Great Depression

Fact:  The only thing FDR saved us from is a quick recovery, just like his hyperinterventionist predecessor Herbert Hoover 

Report this comment
#25) On February 16, 2010 at 3:27 PM, paperpump (96.42) wrote:

unions are not needed in todays world. you can't make a correlation between productivity and labor, because most those statistics take into account capital investments paid for by owners. this is a problem andrew carnegie struggled with. unions are garbage. 

  

Report this comment
#26) On February 16, 2010 at 3:35 PM, lemoneater (78.55) wrote:

Write about the Tweed Ring and Tammany Hall. That probably would cover a couple categories.

Report this comment
#27) On February 16, 2010 at 4:48 PM, FleaBagger (28.76) wrote:

#23) As for workplaces that had private police forces to harrass and assault people trying to start unions, it is instructive to note that that does not prove unions useful and necessary, nor justify the same tactics being used by unions. The Soviets fought the Nazis. Does that mean one side was angelic? Maybe you don't know, but Stalin, the dictator who ruled the Soviet Union from the 1920's until his death in 1953, starved millions of Ukrainians to death. Was this because they were on the Nazi side? No! Turns out, they were his own people. Like Rufus T. Firefly shooting his own men, Stalin was a murderer who did more harm to those under his reign than their foreign foes ever did.

All that to say, not all those opposed to bad people are good people. Not everyone who fights an unjust person or group is just. The same is true of unions. While they did direct some of their wrath against capitalists, the owners of the facilities and equipment they wanted to use, they quickly found that their real enemies were those who were willing to work for lower wages. The people who weren't greedy. Those people just wanted to feed, clothe, and house their families, live modestly, and save some money for the future. They were willing to forego workplace comforts, and even some safety measures, because they had families they believed were worth working hard and taking some risks for. And those workplaces that had no unions had safety improvements as well, over time, when their workers preferred those safety improvements to wage increases.

The unions, meanwhile, had to use violence, intimidation, and sabotage every time someone dared to work for their employer at a competitive wage rate. Like petty warlords or gangsters (in fact, historically many of them were gangsters), they had to defend their turf, even if doing so meant hurting the innocent.

Furthermore, the NLRA was one of the most significant factors extending the Great Depression and suppressing hiring. Who is going to hire someone for a higher wage than their productivity warrants? No one. What if it's a close call, and the government is watching over your shoulder, ready to fine you, harrass you, or even imprison you if you misstep? Not a chance. Unions cause unemployment, exacerbate the plight of the poor, and are fading from relevance none too soon.

Report this comment
#28) On February 16, 2010 at 4:58 PM, APJ4RealHoldings (33.54) wrote:

David, help me learn!

I've always thought the current antitrust system to be functionally broken given the tremendous power many oligopolies have across key industries. 

However I do not believe eliminating antitrust completely would make a significant difference from where we are today. 

....I am of the belief that something needs to be actually done (actual antitrust enforcement in areas where it matters) to stop/dismantle anti-competitive regimes - I do not see this as gov't involvement, but more as court enforcement, such as court enforcements of property rights. 

...as if i was a small business owner trying to launch into a protected industry, i should have a right to bring case to a court over anticompetetive practices by a controlling oligopoly regime

what are your thoughts and opinions on this!????

thanks

Report this comment
#29) On February 16, 2010 at 5:56 PM, whereaminow (24.34) wrote:

Wow guys!  This is going to fun.  Judging by the overall response to this post I think I will try to do just about every one that I listed.  So far it looks like it will be either unions or antitrust law first, but i think every idea has gotten at least some love.  I guess we can't lose no matter what is picked.

Keep on the lookout, probably one week from today for my first post. 

In the end, you guys will be the judge.  CAPS readers are a tough crowd.  I look forward to the challenge!

David in Qatar

 

Report this comment
#30) On February 16, 2010 at 6:38 PM, XMFSinchiruna (27.60) wrote:

David,

This is a great post, and an excellent example of community intelligence through consensus-building. I would love to see the results of this series incorporated into the Thurgood Marshall Academy finance curriculum that we set out to compile as a community.

So many myths have been shattered by the events of the past few years ... it just hasn't sunk in for many as yet. Many people outside this online community still believe the USD is a sovereign-issued currency that is backed by something like gold, and I'm sure every day at least one person finds out about the nature of the Fed and the history of fiat currency, and their financial paradigms are forever changed. This is a gradual process.

Open Letter to Our Founding Fathers

The Scariest Balance Sheet of All

 

Myth: This $134 billion bond caper was a conterfeit bust.

Fact: ?[Hypothesis:]? Attempt at Concealed Quantitative Easing?

22% of you pegged that event as the most overlooked story of 2009.

The well documented buyer-of-interest in the bond markets over recent weeks begs the question about another form of same.

Unfortunately, the one-way road for the USD has already been paved .. the currency will go lower in value, foreign purchasing power, and even status as the reserve currency of the world.

Gold is going to $2,000 and beyond, silver to $50 and higher.

 

 

 

Report this comment
#31) On February 17, 2010 at 1:01 AM, awallejr (79.57) wrote:

As for workplaces that had private police forces to harrass and assault people trying to start unions, it is instructive to note that that does not prove unions useful and necessary, nor justify the same tactics being used by unions.

We are talking improving standard of living and qualtity of life as well.  You think being forced to work under sweatshop conditions and being beat up at the whim of your employer was fine?  I won't dispute mob infilitration in unions later on was a serious detriment. 

Report this comment
#32) On February 18, 2010 at 2:11 AM, FleaBagger (28.76) wrote:

#30) I don't think the bond story is a real issue. It's like I always say when people bring up elaborate conspiracy theories involving shady folks covering their tracks: why sneak around when you can steal in broad daylight?

The reason I don't buy conspiracy theories is because if it's only a theory, it's probably far more elaborate than the true theories that are easy to prove by common knnowledge and common sense: if a central bank (the Fed) doles out money to banks at low interest and those banks lend it out at higher interest, then is there a conspiracy to defraud the American people and steal the value of their hard work? Yes. Is it a theory or elaborate or hidden in any way? No.

It's the same thing with quantitative easing and ridiculous amounts of U.S. debt. Is there gargantuan QE and huge U.S. debt? Yes. Do they need to sneak around with Japanese guys in Italy to do it? No.

Report this comment
#33) On February 18, 2010 at 3:48 PM, mattdaddy21 (< 20) wrote:

Always love reading your blog.  All these topics are intriguing. 

Off subject, can you at some point right a blog on how your perfect American public sector would look?  I'm sure you would make massive cuts on all levels, but what would you leave in place?  Would it essentially be what our Founding Fathers had in mind?  Any additional checks and balances?

Thanks!

Report this comment
#34) On February 19, 2010 at 9:37 AM, whereaminow (24.34) wrote:

mattdaddy21,

Unfortunately, most people can't even imagine freedom anymore.  They are caught up in the Left/Right false paradigm.  If I were to say, we should eliminate public schooling, people would scream, "but how will the children be educated?" even though there was never a shortage of private schooing before the government got involved and the quality continues to decline under government supervision.

I could go on for pages and pages about this.All I can say is that the people who are the most vocal about our "freedoms" have no freaking clue what freedom is, which is why they recite nonsensical statements like "freedom isn't free."  They're idiots.

David in Qatar

Report this comment
#35) On February 19, 2010 at 10:17 AM, milleniumfalcon (< 20) wrote:

 And now for something completely different....

Myth: America is a nation of small businesses.

Fact: By every measure of small-business employment, the United States has among the world’s smallest small-business sectors (as a proportion of total national employment). see: http://www.cepr.net/documents/publications/small-business-2009-08.pdf 

 

Myth: Everyone has an equal chance to be prosperous.

Fact: This is based on the idea that education is equal. Mandatory K-12 education is for the most part based upon local property taxes. In order for this to be true, property across the nation would need to be assessed equally. This, obviously, is not true.

 

Myth: GDP is a valid measure of human well-being and progress. 

Fact: GDP is flawed. Growth in GDP does not measure happiness, it measures monetary exchanges. Two people go through a nasty divorce and hire two lawyer. GDP goes up. A company lays off 1,000 workers and hits its earnings target, GDP goes up.

 

Myth: Economics is a science. 

Fact: Economics is a socially constructed narrative used to explain the world in which we live (like science or religion). It just happens to be one we believe to be true. 

 

Myth: Corporations are benevolent organizations.

Fact: The corporation is an institutional invention specifically and intentionally created to concentrate control over economic resources while shielding those who hold the resulting power from liability for the consequences of its use.

 

Myth: Markets are efficient.

Fact: I won't even talk about this. Fools know better.

 

Myth: Free Trade Is the Path to Better Job Creation.

Fact: Free trade transfers work. It merely expands the world’s division of labor, shifting employment to other cheaper locales.

 

Report this comment

Featured Broker Partners


Advertisement